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Environmental nongovernmental organizations (NGOs) gradually have shifted their focus from affecting policy change to directly engaging in markets. In this role, they can be integrators, like World Wildlife Fund and Environmental Defense Fund, which seek change through constructive corporate partnerships, or polarizers, like Greenpeace and Rainforest Action Network, which disrupt the status quo through confrontation. Either way, they still can affect the policy process, and their actions occasionally may have unintended consequences.

Traditional policymaking is often spurred by research findings or a highly publicized event. Two powerful, historical examples are Rachel Carson’s book, Silent Spring, on the effects of DDT on wildlife, especially birds, and the discovery of 21,000 tons of toxic waste buried beneath Love Canal. Public awareness, politicization, and the coalescence of interest groups around the issue follow. Sooner or later, lawmakers take up the issue and pass legislation to address it. Finally, regulations are implemented and enforced.

Environmental nongovernmental organizations (NGOs) have long been regular players in this process, enabling people with shared concerns to act collectively to bring about change. Unlike the many special interest groups that seek to shape policy outcomes by lobbying politicians and making campaign contributions, environmental NGOs generally do not have the necessary financial resources to play this game. Instead, the groups’ most prominent roles have been as enforcers—filing suit against companies that break the law—and as information providers, collecting and providing actionable information to policymakers, as well as alerting the public to emerging issues and shaping cultural discourse in general. In recent years, however, these roles have given way to a new focus on “private politics,” by which NGOs seek to influence corporate behavior directly, without recourse to government.

“Sue the Bastards!”

In the 1960s, the Environmental Defense Fund (EDF) and other fledgling environmental NGOs adopted a legal strategy best described by EDF’s unofficial motto: “Sue the bastards!” Their first big victory stopped the use of DDT for mosquito control on Long Island. In the 1970s, with new environmental statutes like the Clean Air Act and Clean Water Act demanding sharp improvements from corporate polluters, there were plenty of violators to target. And in the 1980s, as the Reagan administration cut environmental enforcement efforts, NGO “citizen suits,” especially under the Clean Water Act, became an essential part of the U.S. environmental compliance system.

NGOs not only filed suit against corporate polluters, they also sued federal agencies that did not seem to be fulfilling their enforcement role, such as the Environmental Protection Agency. One unintended consequence of this strategy has been the rise in voluntary agreements between industry and government. Such agreements are popular because they are harder for the courts to enforce and provide less scope for NGO lawsuits than legally binding regulations.

Policy Research and Advocacy

With the passage of major environmental statutes in the early 1970s, NGOs began to invest in original policy research. For example, the National Audubon Society and the Union of Concerned Scientists have hired Ph.D. scientists to conduct research into renewable energy policy, and EDF has a roster of well-regarded scientists and economists doing policy work.

Whether NGOs are well positioned to do objective research is not entirely clear. In fact, NGOs face a disincentive to search for hard evidence in support of their positions. Suppose an NGO mounts a well-publicized research effort, the findings of which undermine its contention that a proposed policy would benefit social welfare. The group would have been better off not conducting the research in the first place; even the failure to report its findings may lead politicians to suspect that it is suppressing information that will harm it cause. This highlights the importance of government and third-party research on policy issues. It also speaks to the issue of NGO funding. Presumably, big patrons of environmental NGOs hope to advance our understanding of the best policy options, as well as to build public support for those options. But when it comes to pure policy analysis, their money may be better spent on nonpartisan research institutions.

NGOs may be better suited to serve as policy advocates. The U.S. Climate Action Partnership, a coalition of NGOs and large corporations, drew up a set of policy recommendations for a regulated, economywide, market-driven approach to climate protection. These included mandatory approaches to reduce emissions from large stationary sources, vehicles, and power generation; flexible approaches to establishing a price for carbon that could vary by economic sector; and incentives to encourage other countries to implement greenhouse gas reduction strategies. These policies formed the basis for the Waxman-Markey climate bill that passed the U.S. House of Representatives in June 2009.

After Republicans won the U.S. House of Representatives in 1994, environmental groups faced higher barriers to effecting change through legislation and increasingly turned to “private politics”—engaging directly with corporations. Some NGOs began issuing demands for change in company behavior and following up with boycotts or negative information campaigns if firms proved intransigent. Others adopted a more conciliatory approach, forging partnerships with companies that expressed interest in improving their environmental performance.

Bad Cops

NGOs of the “bad cop” variety threaten businesses with harm if they do not conform to the NGO’s demands. To avoid losing customers, the firm or industry may try to preempt a boycott or bad publicity by voluntarily changing its behavior and seeking an alliance with the NGO—in effect, self-regulating to avoid the threatened harm.

Rainforest Action Network’s two-year international campaign against Home Depot’s sale of old-growth wood provides a classic example. In 1999, the company announced it would phase out its stock of wood from endangered forests by 2002. More recently, a Greenpeace campaign convinced Kimberly Clark to stop sourcing tissue paper from virgin boreal forests in Canada. NGOs have learned that weak firms—those that signal a desire to change—are attractive targets. Once a firm makes voluntary improvements, the NGO may promise not to target it again, but it will only have incentives to honor this promise if self-regulation makes this firm a less desirable target than other potential targets. Thus, firms must prepare to either accede to the NGO’s demands and face a continuing string of demands, or invest in a reputation of intransigence; the middle ground is hard to sustain.

Good Cops

NGOs of the “good cop” variety partner with business, offering technical expertise and positive endorsements if companies are willing to make environmentally friendly changes. EDF’s work with McDonald’s to eliminate Styrofoam clamshell containers was one of the first such partnerships. World Wildlife Fund’s Climate Savers program is a high-profile, ongoing partnership to reduce the greenhouse gas emissions of more than 20 large corporations. Many NGOs are leery of endorsing firms, however, because it could put their reputations at risk. A good example of this sort of risk comes from the Sierra Club’s partnership with Clorox on its Green Works line of cleaning products. The partnership has drawn widespread criticism due in part to the fact that Sierra Club receives 5 percent of the revenues from the product line. An additional concern is that an endorsement might encourage higher sales of a product and thus increase pollution even though the production process has become cleaner.

Is private politics good for society? That all depends on what the alternative is. If effective government regulations are a possibility, then NGO efforts may serve simply to divert political will away from needed regulatory changes. Because regulations can address all firms at once, rather than just a select few, they are often a more powerful tool for solving environmental problems. However, if special-interest pressures block meaningful government regulations, NGO actions can serve to bring about corporate change directly.

Whatever one thinks of NGOs, the new tools of private politics allow these organizations to affect market outcomes more directly and give them new forms of power. Direct engagement in the form of confrontation or cooperation is especially important in countries where formal political institutions are weak or missing altogether. These interactions will remain part of the strategies of NGOs’ in countries where political institutions are robust as well, particularly when parties opposed to the environmental agenda are in power.

Thomas P. Lyon holds the Dow Chair of Sustainable Science, Technology and Commerce at the University of Michigan and is the director of the Erb Institute for Global Sustainable Enterprise.